The approaching Fourth Industrial Revolution, with increasing use of advanced technologies such as 3D printing and robotics, is expected to have a major impact on the manufacturing process globally. The question we address is whether developing countries can harness the digital revolution to boost their industrial growth and employment or whether they will be left behind. We examine how a growing digital economy affects developing countries’ manufacturing labour productivity, with a special focus on sub-Saharan African (SSA) countries, and we discuss the policy implications.

A key message of this paper is that governments need to better prepare for the digital future. New evidence in this report suggests that African countries not only face a significant digital divide but also benefit less from increasing levels of digitalisation. To digitalise manufacturing, African countries need to increase access to the internet and other information and communications technologies (ICT). This can be achieved through implementation of effective policies that will alter country-specific conditions and contribute towards improving the investment climate, firm capabilities, national innovation systems and ICT infrastructure, direct financing opportunities, and participation in global value chains (GVCs). Taxes and incentives can serve as important drivers for bridging the rural–urban digital divide, while policies targeting public-access solutions can increase access to digital technologies. Financial support from the government needs to be extended–not only to manufacturing and services startups but also to ecosystem enablers such as technological and innovation hubs.